The bond markets proved their resiliency in 2009, recovering dramatically from both a severe credit crisis and a deep economic recession. In a recent panel discussion, three of T . RowePrice ’s senior bond managers outlined what changed in 2009 and where the market may be heading in 2010. The panel included Steve Huber, manager of the T . RowePrice Strategic Income Fund; Mark Vaselkiv, manager of the T . RowePrice High Yield Fund and a 21-year veteran with the firm; and Mike Conelius, also a 21-year veteran with T . RowePrice and manager of the T . RowePrice Emerging Markets BondFund . How the Bond Market Turned the Corner Bond markets rallied in 2009 after investors nearly abandoned higher-yielding groups–corporate bonds, high-yield bonds, and emerging market bonds–during the crisis of 2008. As many altered course, the global bond market experienced one of its best annual performances. Treasuries struggled, however, hampered by low yields and fears about inflation. Several key events helped produce this fast-paced recovery: • Fed efforts to improve market liquidity proved largely successful. Many companies issued new bonds, providing an attractive stream of new opportunities for investors. • As the economy stabilized, investors became more willing to take risks and look for possible bargains. • [...]

Fund Times: New Funds from American, Oakmark, Masters'

American Funds has filed to launch its first new mutual fund of the decade. The firm plans to launch Short-Term Bond Fund of America on Oct. 1, 2006, according to a filing with the SEC. The fund fills the gap between the firm's Intermediate Bond Fund of America AIBAX and money market funds.

The firm's last mutual fund launch was American Funds New World NEWFX, which debuted in 1999.

Short-Term Bond Fund of America looks to be a pretty straightforward high-quality short-term fund that will likely own a diversified portfolio of Treasuries, mortgages, and corporate bonds: The filing states, "The fund seeks to provide you with current income while preserving your investment by maintaining a portfolio having an average effective maturity no greater than three years and consisting of debt securities primarily with quality ratings of AA or Aa or better." No managers have been named, but it will likely be similar to the group that runs American's other taxable-bond funds.

Oakmark Plans Global Select FundOakmark is taking its focused approach on the road. Harris Associates has filed with the SEC for a new world-stock fund that will typically invest in just 20 stocks. The fund will be run by the firm's best-known managers. Bill Nygren will run the domestic half of the portfolio while David Herro will select foreign stocks. Expenses are expected to begin at 1.75%. According to the filing, the earliest possible launch date would be at the end of September 2006.

Masters' Reopens Small-Cap FundMasters' Select said it has reopened Masters' Select Smaller CompaniesMSSFX. The firm had temporarily closed the fund when it fired David Anthony of Ranger Investment Management. However, it has now found a replacement and so it has reopened now that it has the capacity to take in more money. The new managers are Tucker Walsh and Michael Malouf of Copper Capital Partners.

Copper Capital began running Old Mutual Copper Rock Emerging Growth OMARX in January 2006, but the pair have longer records from previous funds. Walsh produced decent returns at the now merged-away State Street Research Emerging Growth, while Malouf oversaw a steep rise and fall at Neuberger Berman Millennium NBMIX.

Delaware Funds CEO ResignsJude Driscoll--president and CEO of Lincoln Financial's asset management arm, Delaware Investments--resigned his post today. Driscoll joined Delaware as head of fixed income in 2000. He then took the posts of president and CEO in 2002. Under his watch, Delaware successfully attracted two talented management teams from other firms: A crew from Merrill Lynch, led by Tysen Nutt, that runs Delaware Large Cap Value DELDX and an ex-Transamerica management team, led by Jeff Van Harte, that leads Delaware Large Cap Growth DGDAX. The reason for Driscoll's departure is unclear at this point, as are the firm's succession plans.

New Focused Masters' FundAt the end of June, Masters' Funds launched Masters' Select Focused Opportunities--an even more focused version of its typical funds. Three pairs of managers pick just five to seven stocks each, making for an overall portfolio of just 15 to 21 stocks. The pairs are Craig Blum and Stephen Burlingame of TCW, Christopher Davis and Kenneth Feinberg of Davis Selected, and Michael Embler and Peter Langerman of Mutual Series. The fund charges an expense ratio of 1.5%.